This document discusses foundational concepts in business studies, covering the definition of business, types of activities, characteristics of business, and the classification of business objectives. It also outlines various forms of business organizations, such as sole proprietorships, joint Hindu family businesses, partnerships, cooperative societies, and companies, detailing their structure, legal frameworks, and ownership. Additionally, it highlights important factors to consider when starting a business, including selection, size, ownership, and financing.

1. BUSINESS STUDIES - II
BY- GYANANJAYA BEHERA

2. TOPIC TO BE DISCUSSED
1) Foundation of Business
2) Forms of Business Organizations
3) Private, Public & Global Enterprises
4) Business Services

3. FOUNDATION
OF
BUSINESS

4. What is Business ?
• Business word has been derived from “Busy”. Business means Being
Busy.
The activity may consist of :
• Production
• purchase of goods for sale
• exchange of goods
• supply of services
• Business is an activity performed to earn profit.

5. Types of Activities
Economic Activity Non-Economic Activity
• Activity performed with an
intention to earn something in
return
• Activity performed for satisfaction
of an individual concern
• e.g:- Business, Profession,
Employment
• e.g:- Teacher teaching his own son;
doctor treating his own son
• e.g:- Money involvement is there • e.g:- Money involvement is not
there

6. Characteristics of Business
• Business is an economic activity, it is performed in order to earn profit
• Business involves Production or procurement of goods or services
• Sale or exchange of goods and services for the satisfaction of human needs
• Dealings in goods and services on a regular basis
• Business is performed only for earning profit
• The returns from business is uncertain, as risk is involved

7. Business v/s Profession v/s Employment

8. CLASSIFICATION OF BUSINESS

9. Objectives of Business
• Source of Income
• Source of finance for expansion and growth
• It indicates the efficient working of business
• Builds reputation
• Innovation
• Productivity
• Earning profits
• Social responsibility

10. Business Risk Causes
• Natural Causes
• Economic Causes
• Human Causes
• Financial Causes
• Other Causes

11. Starting a Business – Basic Factors
1) Selection of Line of Business
2) Size of the Firm or Business or Organization or Industry
3) Choice of Form of ownership
4) Location of Business Enterprise
5) Financing the proposition
6) Physical facilities
7) Business Layout
8) Competent & committed workforce (Human or workers)
9) Tax Planning
10) Launching the business

12. Forms
Of
business organizations

13. SOLE PROPRIETORSHIP
Sole proprietorship is a popular form of business organization and is the most suitable form for small
businesses, especially in their initial years of operation. Sole proprietorship refers to a form of business
organization which is owned, managed and controlled by an individual who is the recipient of all
profits and bearer of all risks. This is evident from the term itself. The word “sole” implies “only”, and
“proprietor” refers to “owner”. Hence, a sole proprietor is the one who is the only owner of a business.
This form of business is particularly common in areas of personalized services such as beauty parlour,
hair saloons and small scale activities like running a retail shop in a locality.

14. JOINT HINDU FAMILY BUSINESS
Joint Hindu family business is a specific form of business organization found only in India. It is one of
the oldest forms of business organization in the country. It refers to a form of organization wherein the
business is owned and carried on by the members of the Hindu Undivided Family (HUF). It is governed
by the Hindu Law. The basis of membership in the business is birth in a particular family and three
successive generations can be members in the business.
The business is controlled by the head of the family who is the eldest member and is called karta. All
members have equal ownership right over the property of an ancestor and they are known as co-
parceners
There are two systems which govern membership in the family business, viz., Dayabhaga and
Mitakashara systems. Dayabhaga system prevails in West Bengal and allows both the male and female
members of the family to be co-parceners. Mitakashara system, on the other hand, prevails all over India
except West Bengal and allows only the male members to be co-parceners in the business.

15. PARTNERSHIP
The Indian Partnership Act, 1932 defines partnership as “the relation between persons who have agreed to
share the profit of the business carried on by all or any one of them acting for all.”

16. COOPERATIVE SOCIETY
The word cooperative means working together and with others for a common purpose.
The cooperative society is a voluntary association of persons, who join together with the
motive of welfare of the members. They are driven by the need to protect their economic
interests in the face of possible exploitation at the hands of middlemen obsessed with the
desire to earn greater profits.

17. COMPANY or JOINT STOCK COMPANY
A company is an association of persons formed for carrying out business activities and has a legal
status independent of its members. The company form of organization is governed by The
Companies Act, 1956. A company can be described as an artificial person having a separate legal
entity, perpetual succession and a common seal.
The shareholders are the owners of the company while the Board of Directors is the chief managing
body elected by the shareholders. Usually, the owners exercise an indirect control over the business.
The capital of the company is divided into smaller parts called ‘shares’ which can be transferred freely
from one shareholder to another person (except in a private company).

19. Private, Public
And
Global enterprises